City Improves Incentives for Granny Units in Los Altos

What homeowner wants to reduce the cherished privacy of their valuable single-family Los Altos homestead by inviting others to live on it? Who wants to build granny units in Los Altos?

Probably a few people who want their elder parents on the premises, or want more space for those 30-year-old offspring living at home again. For the wealthy, a more private unit would be nice for the nanny, personal cook or personal trainer.

Probably very few Los Altans would create granny units in Los Altos expecting to make a killing in the rental market!

And according to some real estate specialists, a detached granny unit does not boost the resale value of a home!

And what is a granny unit?

Two new 2016 state laws require cities like Los Altos to facilitate, not block, the development of granny units – officially called Accessory Dwelling Units (ADUs) – on the lots of existing single-family and multi-family dwellings. There are two types of ADUs: regular ADUs include a bathroom and a full kitchen or kitchenette and are no larger than 1200 sq. ft. Junior ADUs only have a bathroom and perhaps a microwave, bar sink and a small refrigerator. JADUs are limited to 500 sq. ft. So a granny unit is a regular type ADU – one with a complete kitchen.

Council to Vote on New Ordinance

Lalahpolitico finds the proposed new “granny unit” ordinance – to be considered May 23 by Los Altos City Council – to be much better land use policy than the old one. 1) We prefer the staff recommendation of permitting ADU construction on lots of 10,000 and up. The alternative “considered” 12,000 lot size threshold would be too high a bar. 2) However, we find that limiting the maximum size of an ADU to 800 square feet is too restrictive. [ May 9 staff report and the May 23 staff report ]

OVERVIEW: Our spreadsheet twiddling shows that the larger parcels of 12,000 and up can easily accommodate ADUs up to 1200 square feet, a limit which has been widely adopted in the Bay Area. A sliding scale from 800 max to 1200 max, rather than a one size fits all parcels might be a better rule. [This is similar to how FAR is calculated on R1 lots larger than 10,000 square feet…as a percentage of the “extra” area on the parcel.] The advice from the City Attorney to impose no deed restrictions and no rent control seems to comply with the new state law, past rent control judicial decisions, and frankly is better public policy…removing current homeowner disincentives to creating ADUs.

Per the City staff report of May 9, 2017, the City has used a minimum lot size threshold to restrict the development of regular ADUs. For ADUs attached to the home, the minimum lot size has been 13,000 square feet, and for detached ADU’s the minimum lot size has been 15,000 square feet.

Since the 1990s the City of Los Altos has been trying to shift the burden of production of state mandated rent controlled BMRs on homeowners rather than big developers. Here are the income limits a person needs to not exceed if he/she wants to enroll in the BMR condo/rental application lottery.

Unique among other California cities, Los Altos also has been imposing a BMR (below market rate) deed restriction that requires you, the homeowner, to rent out your ADU to only Low and Very Low Income tenants when your family members don’t need it anymore. The maximum unit size has been restricted to 800 square feet no matter how large and how underdeveloped your lot. Lalahpolitico: With those burdensome regulations and disincentives, it is no surprise that the City added only about 50 such units since the 1990s. I guess that’s what they meant to do…namely restrict.

So is changing the City ordinances on ADU’s going to ruin our semi-rural character and quiet neighborhoods in Los Altos? Will we see a torrent of applications to add ADU’s through additions or conversions? Oh, probably not.

The way state law is written, it appears that adding a 2nd story ADU over an existing garage is permissible. It seems all the City can do is prevent instrusive windows. Somebody, tell me it isn’t true?

ADU Conversions in existing structures
…dictated by the state

Under the new state laws, ADU’s can be created inside ANY existing single family home or accessary structure (with some fire safety caveats) regardless of lot size.

If your garage has a minimum 5 ft. setback from the side and minimum 5ft. setback from the rear property line, it and its second story (existing?new?) per the state law can be converted to an ADU irrespective of your lot size. [However the pending new City ordinance says you can’t have a 2nd story rear window or 2nd story side window on that garage unless the window set backs are 25 feet and 17.5 feet respectively. Hey, you can put windows on the other two sides. ] Lalahpolitico wonders how the state law about the garage second-story applies to our Los Altos Single Story Overlay districts? Does it matter if the garage is attached or free-standing?

If you convert your garage you will have to replace that lost parking. Perhaps with a carport? If the garage ADU is within ½ mile of a transit stop, the ADU does not require any parking. If it is not that close to transit, it requires just one tandem spot per bedroom, a spot which can be on your existing driveway.

Image: Some Plans for detached ADUs

Some detached granny house plans from 600 square feet to 1000 square feet from pmhi.com. The size of a new granny unit is limited by your lot size and how much your existing house already covers the lot as well as by the maximum set by the State and City – perhaps 800, perhaps 1200. The usual side and rear setbacks still apply. Detached units must be in the rear yard. Entry doors should not be visible from the street. The ADU should “look like” the main house….

ADUs in new construction…City can partially regulate

The new City of Los Altos ordinance applies mainly to ADU’s which an owner wants to produce via constructing an addition to the property – either an addition attached to the existing house or an addition which is a detached “cottage.”

City Council discussed a version of a proposed new granny units in Los Altos ordinance on May 9. The City lawyer gave input and so did city council. The new proposed version of the ordinance will be discussed again and likely voted on this Tuesday, May 23, 2017 .

Here are some ordinance provisions per the staff report prepared for the May 23 meeting:

The prior ordinance’s 800-square foot limit on an ADU addition is maintained. However the staff report says City Council can at its May 23 meeting increase that to a maximum of 1200 as suggested in the state law… if council so desires. Also the state and the City say the size of an ADU addition cannot exceed 50% of the area of the existing single family home. [Lalahpolitico: it doesn’t make sense to have the 800 sq. feet maximum ADU size limit on a 10,000 square foot lot also apply to our lots of 12,000, 15,000, 20,000 and 40,000 square feet. They can and probably should support larger ADUs. In particular, the City of Los Altos Hills has supported MULTIPLE ADUs on its lots – which are one-acre plus. Could Los Altos treat our one-acre districts similarly? Let them have more than one ADU?

City rules for lot coverage and setback apply to newly constructed ADUs. Your neighbor cannot add an ADU that exceeds what he/she could add to their main house.

And please see our discussion below about how the proposed 800 sq. ft. ADU limit affects lot coverage outcomes of the proposed ordinance on various lot sizes – 10,000, 11,000, 12,000, 13,000, 15,000, 20,000, 40,000. Remember that the lot coverage and setbacks apply to all additions…that expand the home….whether to add bedrooms and media rooms OR to build an ADU. Your neighbor cannot add an ADU that exceeds what he/she could add to their main house.

If you neighbor has totally built out his/her lot, that neighbor cannot add a granny unit in Los Altos. However, they can convert part of their existing house to an ADU. So that 5-bedroom house could become a 3-bedroom home with an attached ADU.)

The minimum lot size to add an ADU is reduced to 10,000 square feet, irrespective of whether the addition is attached or detached. Lowering the lot size will increase the number of potential properties that quality for ADU additions from 2,574 parcels to 7,371 parcels.[Lalahpolitico: Yes this is the right thing to do. If in the past 20 years we only got 50 ADUs built, perhaps in the next 20 we might get 150 -200 built? ]

An enforced BMR deed restriction would mean the homeowner will be offered tenants from a restricted pool of renters by a BMR enforcing organization which the City chooses. This is NOT in the proposed new ordinance at the moment. The language could change during the May 23 meeting.

At the moment, there is no BMR deed restriction in this new ordinance – state law says granny units are by their nature “affordable housing”. Also the City of Los Altos attorney has opined that recent judicial decisions – Palmer – say rent control is illegal in this situation.[Lalahpolitico: frankly forcing a homeowner to participate in the BMR tenant income-policing process is quite an enormous disincentive for a homeowner to create an ADU and later rent it to a non-family person. Maybe just leave that granny unit vacant? So good riddance to that existing BMR deed restriction; and I understand it was never enforced –thank goodness. But just the idea of it was a chilling disincentive in my opinion. Big brother in my home! …In Los Altos, the BMR “Requirement” for new construction has only kicked in on residential projects of 5 units and up. Let’s stick with that. It’s just wrong to try to apply BMR to a 1 dwelling unit home.]

Figure: Granny units in Los Altos are to be rented for a minimum of 30 days

The new ordinance does not require owner-occupany on the lot and only a minimum rental period of 30 days. This means programs like HomeAway and Airbnb are against the code.

There There is no deed restriction for owner-occupancy of the main home or the ADU. The City attorney says this is not part of the state law, and our ordinance cannot be more stringent than the state law in this regard. [Lalahpolitico: also some citizens have pointed out that families sometimes get a year or two career assignment in another state or country but expect to return to their wonderful Los Altos house. An owner-occupancy deed restriction would seem to force them to sell when they don’t want to. Furthermore, this new ordinance will create the most incentives for ADU creation and the least administrative hassle/work for city staff if there are NO DEED restrictions.]

The minimum ADU rental term is set at 30 days. The attorney says this is what the state law says, and our ordinance cannot be more stringent than the state law in this regard. [Lalahpolitico: perhaps we can handle Airbnb abuse complaints in other ways than in this ordinance or in a ordinance that forbids vacation rentals. And consider that plenty of owners of Los Altos ADU’s will undoubtedly prefer a respectable, long-term tenant. Not everyone wants to be an innkeeper! Just because the term CAN BE as short as 30 days, it does not mean this will be the practice in our charming village full of nice people. And actually Lalahpolitico has herself enjoyed vacationing for 3 or 4 day stays in various homeowners’ luxury, short-term rentals throughout California. These have been pool houses, carriage houses etc., in Sonoma, Carmel Valley, Santa Barabara, Santa Ynez, Pasadena, etc. It is a wonderful alternative to a big hotel resort. ]

For attached ADU additions to the main house, it will be allowed to have interior door access – double doors, or whatever – from the main house. This is in addition to a discrete exterior access door for the ADU.[Lalahpolitico: yes, this is common sense because a caregiver –son or daughter — may need to attend to a their infirm, elder parents on the other side of the double doors!]

Privacy/density is protected by Los Altos R1 zoning

Basically the same zoning rules on lot coverage, setbacks, height and daylight plane, rules that limit what your neighbor can add-on or rebuild for a house, also govern the construction of granny units in Los Altos. So whether the neighbor’s newly constructed lot coverage is a bunch of new bedrooms for a growing number of kids, or whether it is granny unit rooms for elders or for an unrelated tenant….should not matter much to you. Lot coverage is lot coverage.

I created a spreadsheet in Microsoft.xls to see how single-family homeowners with various size lots – 10,000 and to 40,000 – and various size homes, 2500 sq ft. and larger…could add square feet of construction for a) a maximized amount of main house, or for b) an up to 800 sq ft. ADU, or c) an up to 1200 sq. ft. ADU.

I assume that the homeowner builds only ONE of a, b or c. Obviously in some cases of smaller homes on larger lots, there is leeway for an owner to add to a main house AND to build an ADU. For simplicity I consider only one-story construction. [For two story construction, there is less lot coverage and LESS FAR too. A 2-story home on a given lot has less space than could be built on the lot as one story. Basically it’s 35% for a single story vs. 30% for a two story. ] I do not consider creation of ADU’s on multi-tenant parcels.

Bottom line: The spreadsheet suggests that Los Altos lots over 12,000 can support an ADU of 1200. And extrapolating… a smaller home – say 3600 on a 40,000 lot could easily support an ADU at the State limit of 50% of the home, aka an 1800 sq. ft ADU. That’s the size of some small homes in the University Ave./Orange Ave. neighborhood. Maybe too generous though?

The spread sheet shows that the existing City zoning does a great job of limiting the lot coverage impact of an ADU or of a maximum home addition. But I don’t see why adding 1200 square feet of density to the home for more bedrooms, bathrooms and media rooms has less impact on neighbors than adding 1200 for an ADU with a “second” kitchen.

However, I understand that a 1200 ADU limit, even on our one-acre lots, clearly defines the new ADU space, especially if detached, as a cottage…not a second home on the same parcel. A second home on the parcel would be a DUPLEX. That’s not what this ordinance is about. [However, the City of Los Altos surely could use a Duplex zone? A policy for R2 parcels — not just a policy for R1 with ADUs scattered here and there –could increase the the amount of naturally-occurring affordable housing in Los Altos.]

So yes, the City should stick with the commonly used ADU maximums. But how about a sliding scale: Perhaps the Max ADU size could range from 800 on the 10,000 sq foot lots… up to a 1200 max ADU on 12,000 plus lots? Why burden the larger lots with an 800 limit? It’s potentially a disincentive. One size does not fit all.

Advice for a home-buyer:

If your prospective City of Los Altos single-family home is on a parcel next to a much smaller lots or a much larger lots, you better be looking into what their zoning is like. How could those neighbors’ additions and ADUs be unlike what your lot allows?

Caution for a wannabe ADU Creater:

Although non-family renters may value a detached ADU more highly that space attached to your home, here’s a thought from a Zillow post. It alleges that in surburban neighborhoods like ours, buyers are not expecting an ADU. Appriasers place all the value on the square footage in the main home. Thus the addition of a big extra 1200 square feet of bedrooms, baths and media room on the main house will make the house appraise for more ….whereas if the 1200 were packaged as a DETACHED ADU it would add zero to the appraisal. Go figure! The potential rental income stream is not valued per Zillow! And do research on current California landlord – tenant law. Can you refuse to renew a tenant lease and get your space back for any reason?

Advice to the City: One, two, three

Yes, yes, yes. Please do create incentives for homeowners to produce ADUs at their home. One: Removing the BMR (rent control bureaucracy) deed restriction as advised by the City Attorney will substantially increase the attractiveness of owning an ADU. [I cannot find another city that has had such a BMR restriction. It must be rare.] Two: Lowering the lot size threshold to 10,000 square feet from 13,000 and 15,000 will be a good second step for increasing the supply of ADUs.

Three: A third good step would be to increase the maximum granny unit size to 1200 from 800; if the lot is not built out, what difference does it make if the extra 1200 square feet is a bunch of extra bedrooms….or a granny unit?

Figure: Meet our Urban Planning Overlords…

ABAG is a non-elected governmental organization which sets GOALS for Cities to produce new Below-Market-Rate housing. Los Altos cannot meet the unrealistic goals that were set for 2020. Our future goal post should be moved way down during the “Plan 2040” planning process occurring now.

The City also should join with other hill Cities and lobby our “Expert Affordable Housing” overlords… ABAG [Association of Bay Area Governments] to get some kind of “tally credit” towards our A.H. goals when we add to the stock of ADUs. Also, our City and similar cities should negotiate with ABAG to get our ludicrous goals/quotas for around 200 units of Very Low Income and Low Income housing reset to zero. Such units should not be built on expensive Los Altos land. Instead…

Like other cities, Los Altos is looking at charging an “affordable housing impact” fee on all new construction for offices, commercial space and homes and apartments. [But we hope that new granny unit square footage will NOT be assessed a fee!] The idea is that those accumulated impact fees can be given to a professional organization in the Affordable Housing Industrial Complex, whose mission it is to build dedicated A.H. apartments administered by the BMR quasi-governmental organizations. All residents in the these official 100% A.H. projects — places with NO market-rate paying tenants — are being subsidized with government taxes at whatever amount the tenants’ income level entitles them.

Lalahpolitico’s magical A.H. bus tour

A while ago, Lalahpolitico toured eight City of San Jose Affordable Housing Complexes built with RDA funds

Almost a decade ago I took a lovely bus tour of 8 A.H. projects built by the City of San Jose. This was a PR campaign by San Jose’s Re Development Authority (RDA), which was on the verge of being shut down by Governor Brown. This was Brown dealing with the 2008-9 budget crisis — all RDAs statewide were indeed disbanded.

All the A. H. projects built by the San Jose RDA were extremely attractive and well-maintained. Units were of normal sizes. No project I saw seemed to be more than 10 years old. Some were more garden style; some more multi-story. One had a nice pool!

I hope the future affordable housing impact fees that will be collected succeed in building A.H. projects in San Jose again!

Reader caution: If you live with cul de sacs, flag lots, hillsides or two-story structures, your ADU options may differ from what Lalahpolitico tried to discuss in this article. Also many fine details about parking, fire safety, etc. are described in some of the Resources listed at the end of this article.

About the author

lalahpolitico

Norma Schroder is an economics & market researcher by trade and ardent independent journalist, photographer and videographer by avocation. Enthralled by the growth of the tech industry over the decades, she became fascinated with the business of local politics only in the past couple of years.